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5:16 pm - Tuesday November 12, 2019

Budgeting with Electronic Envelopes

| Budgeting | Rating: 4.5
by Numan

I must admit, I used to struggle with budgeting.  I mean it was always a pain to figure out what categories to use in a budget, how much to budget for each category, and manage to the budget.

What I tried at first was Microsoft Money and their built in budget tool.  I did not care for it, as it was difficult to use, difficult to manage, and it never seemed to work for us.  We were never able to stay within budget.  Then I tried a basic Excel spreadsheet.  This was easier to use, but still I could never manage to our budget and we always struggled.

Budget Failures

The reason we always failed at creating and managing a budget I think were two fold.

  1. I really hate to budget.  Makes me feel like I am limiting myself with my money.  I like to now call what I do a spending plan.  My wife and I give every dollar we make a job.
  2. Managing to a budget was difficult because even though we budgeted a certain amount for instance eating out, we never knew how much we had left to spend.

Spending Plan Success

What we have switched to that works for us is a spending plan.  For the plan we use a great spreadsheet that you can find over at It’s Your Money.  It is an envelope spreadsheet.  Why it is perfect for us is you are able to allocate funds into a virtual envelope and as you spend money in that category it reduces the envelope by that amount so you always know how much you have left to spend.  If you overspend, you must borrow funds from another envelope to make up the negative.  That way, you can never spend more than you have (as long as you stay on top of managing the envelope system).

So if you are looking for a better way to budget, give this a try!

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